"I have never
been more embarrassed to work in the NHL as I was on July 1st and
2nd [2001]. I know we can't support the salaries. I know that some
of the teams who have spent that money are doing it without the financial
capability to pay the money. I'm running my business like a business.
I'm going head-to-head with people who are crazy, as far as I'm concerned."-Vancouver Canucks GM Brian Burke, July 2001

"If [the
owners] want to pay us, they must be making money, it's not up to
us to say: 'No, don't give us that much money.' "-Sharks Center Vincent Damphousse, July 2001

"The challenge
for the future is making sure that we have an economic system that
enables all of our clubs to be economically viable, stable and competitive
where they're currently located. All of our fans need to know at the
start of the season that their team has as good a chance of winning
the Stanley Cup as any other team. It can't be based solely on how
much teams spend on payroll."-NHL Commissioner Gary Bettman, February 1st, 2002

"Obviously,
[Bettman]'s making an assumption here. He seems to be convinced that
all the owners are capable of creating a competitive team. There never
has been the slightest bit of evidence that this is the case. There
are some owners who know what they're doing and others who are totally
inept. If Bettman doesn't know which of his governors is which, a
list can be provided on request."- Al Strachan, Toronto Sun

In today's National Hockey League, economics is intruding on the ice
and threatening the viability of the game. Ticket prices seem to go
up every year as does the basic staple of the hockey fan: arena beer.
According to owners, prices go to cover the "$10 million, $15
million, $20 million [a lot of teams lose] every year."(Pittsburgh
Penguins Player/Owner Mario Lemieux, July 2001). Some franchises are
playing in brand new, state of the art facilities while others toil
in buildings that are hopelessly out of touch with today's sports
landscape (missing the luxury boxes and club seats vital to fiscal
solvency). Team owners are demanding that local and federal taxpayers
vote them subsidies or face losing the team to another market that
will shell out the bucks. Canadian teams can't afford to spend anywhere
near as much as their American opponents due to their smaller population
base and the weakness of the Canadian dollar relative to the US dollar.
Teams in smaller cities and with smaller fan bases often can't spend
commensurately with their older, more popular foes due to a lack of
TV and radio revenues. To top it all off, the Collective Bargaining
Agreement (CBA) between the NHL Players' Association and the League
will expire prior to the beginning of the 2004-05 season and many
fans and analysts see a long, bitter labor war developing. The NHL
seems to be in trouble, but what is the solution? How can these problems
be addressed in a manner that will satisfy the NHL, the NHLPA and,
perhaps most importantly, the fans?

Major League Baseball
is in a situation similar to the NHL in many ways. Neither league
has significant restrictions on player or team salaries and neither
has strong revenue sharing agreements. Perhaps the most chilling similarity,
however, is that MLB narrowly averted a strike/lockout during the
2002 season while the NHL looks to be headed towards the same in 2004.
Both leagues have shortened seasons in the last 10 years in response
to labor/management disputes and obviously did not resolve their differences
even when play resumed. Conventional wisdom says that one more work
stoppage will effectively kill Major League Baseball as we know it,
and the same may hold true for hockey.

The chorus of
complaints from all sides is the same for both leagues. Every group
involved with the NHL has its own concerns. Management blames the
players for being mercenaries, always out for as much as they can
get regardless of the welfare of their team or the league. The small
market owners decry the spending habits of the few very wealthy teams,
claiming that they hurt the league as a whole. These small market
owners feel that the rapidly rising costs of owning a hockey team
may force teams out of business unless new revenue streams appear.
Wealthier owners insinuate that the problems of lesser spenders have
more to do with mis-management and tight purse strings than with a
lack of revenue. The players argue that salaries are rising because
the owners are offering higher salaries, not because the players are
demanding them. As the ones that provide the product on the ice, the
players union (NHLPA) fights to ensure that its members receive their
share of the profits from the teams. Fans, the overlooked but ultimately
decisive group in these battles, are pinched by the rising cost of
tickets, merchandise and concessions at games, costs that often go
up to fund the new buildings that owners covet.

Players and owners
have been at each other's throats since the beginning of organized
professional sports. There are records of gladiators refusing to fight
until they got better living conditions in ancient Rome, baseball
players quitting to form their own league in response to the reserve
clause in the late 19th century, and, of course, the glut of work
stoppages over the last 25 years in the NFL, NHL and MLB. The primary
effect of labor disputes seems to be to drive fans away from the sports
they love. There are a myriad of choices for consumers to choose from
with their discretionary entertainment dollars and even the threat
of a strike will cause some season ticket holders to abandon the seats
and take a cruise instead. Labor disputes generally hurt both the
owners and players as much as if not more than simply living with
the current system.

Given the complaints
of the owners, players and fans, what solutions are out there? Most
fans, spurred by media reports and the pleas of league officials,
agree with the general stance of the smaller market owners and call
for some combination of salary caps, luxury taxes and/or revenue sharing.
. Recent corporate scandals outside and inside the sporting world
have exacerbated the sense that the powerful feed their greed off
the little guy, in this case, the fans. Richer owners and players
are understandably wary of such suggestions, but they have been enacted
in two of the four professional leagues with some success Proponents
of such measures say that they will do some or most of the following:
keep overall payrolls down; keep individual salaries at manageable
levels; keep ticket prices from increasing as quickly; reduce the
disparity between the "haves" and "have-nots"
of the NHL; and increase competition on ice league-wide. Other less
known (or popular) options are available as well: reducing the number
of teams in the league; league "ownership" of player contracts;
or just letting things go as they are.

Despite the popular
acclaim for a salary cap and/or revenue sharing, few fans really have
a thorough understanding of what these measures entail. None of the
proposed solutions are cut and dried; indeed they are some of the
more convoluted labor agreements known to mankind (just ask an NFL
"capologist" or anyone trying to make a trade in the NBA).
There are a variety of caps, revenue plans, taxes and such, all with
their own benefits and drawbacks. In the following pages we'll try
to explain the basics of concepts normally better left to lawyers,
accountants and agents.

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